YOUR COMPANY IS LOOKING FOR BUSINESS FINANCING SOLUTIONS!
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CONTACT US
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
"Revenue is vanity, profit is sanity, but cash is reality." - Unknown
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Business cash flow financing and working capital solutions – Save time, and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
Business Cash Flow Funding
Understanding Business Cash Flow Financing
Funding your business correctly is a key responsibility for every business owner. How do we finance business cash flow to the point where we have the right financing to continue and grow?
The goal? A constant positive hum in cash! Let’s dig in.
Breaking Free from the Cash Flow Crunch
Problem: Canadian businesses frequently encounter periods where incoming payments lag behind operational expenses. This timing mismatch forces companies to delay growth initiatives, miss supplier discounts, and struggle with day-to-day operations.
Solution: Let the 7 Park Avenue Financial team show you how Business cash flow funding provides immediate working capital, allowing companies to maintain momentum while waiting for receivables.
2 Uncommon takes on Cash Flow Finance
- Cash flow funding can actually improve supplier relationships by enabling early payment discounts, creating a positive savings cycle.
- Using cash flow funding seasonally can be more cost-effective than maintaining more extensive cash reserves year-round.
Did You Know?
- 82% of business failures are due to poor cash flow management
- Average invoice payment terms have increased to 45-60 days
- 60% of Canadian small businesses seek external funding annually
- Cash flow funding market growing at 25% annually
- 77% of businesses rely on external funding for growth
The Importance of Cash Flow Management
A great way to think of cash flow is simply focusing on how funds move via your incoming revenues and outgoing expenses.
Pretty basic, right? But when a profitable business can even fail when cash flow fails, that 'pretty basic' statement becomes all-important.
The Role of Proper Financing in Business Success
Of course, having the right financing in place is only one solution to the challenge, albeit an important one.
Cash flow lending is an option that evaluates a business's cash flow instead of physical assets for loan approval. For start-up or earlier-stage firms, that is all-important; yet, the wrong financing at the wrong rates and structures is also a double-edged sword, especially when your key assets secure financing.
What is a Cash Flow Loan?
Definition of a Cash Flow Loan
A cash flow loan is a type of financing specifically designed to help small businesses manage their cash flow and cover short-term cash flow gaps.
This form of funding provides the necessary working capital to bridge the gap between income and expenses, allowing businesses to invest in growth opportunities and maintain a healthy cash flow.
By addressing immediate financial needs, cash flow loans ensure that businesses can continue their operations smoothly without disruption.
How Cash Flow Loans Work
Cash flow loans provide businesses with a lump sum of money to cover day-to-day expenses such as rent, payroll, and inventory.
Unlike traditional business loans, cash flow loans are typically repaid over a shorter period, ranging from 3 to 60 months, with interest rates starting from 0.9% per month.
One key advantage of cash flow loans is the speed of access; funds can often be deposited within 24 hours. Additionally, these loans have more relaxed credit requirements, making them accessible to businesses that may not qualify for traditional business loans.
Benefits of Cash Flow Loans for Small Businesses
Cash flow loans offer several benefits to small businesses, including:
-
Quick Access to Capital: Businesses can obtain the funds to cover short-term cash flow gaps, ensuring smooth operations.
-
Flexible Repayment Terms: These loans offer flexible repayment options, with the possibility of early repayment without penalties.
-
Relaxed Credit Requirements: Cash flow loans are more accessible to businesses with poor credit, providing an opportunity for those who might struggle to secure traditional financing.
-
Investment in Growth Opportunities: The funds can be used to invest in various growth opportunities, such as hiring new staff, expanding premises, or upgrading equipment.
-
Healthy Financial Position: By managing cash flow effectively, businesses can maintain a stable financial position and avoid the pitfalls of negative cash flow.
Types of Cash Flow Finance
When it comes to managing cash flow, businesses have several financing options. Each type of cash flow finance serves different needs and can be tailored to specific business requirements.
Monetizing Current Assets for Cash Flow
We’re all for growing sales revenues, but problems quickly arise when you overextend credit and are improperly financed.
Invoice finance allows businesses to receive upfront payments for invoices before customers' actual payments are made, helping to manage temporary cash flow issues. Those challenges are most often solved by monetizing current assets—your A/R and inventory.
Finance Solutions for Cash Flow
Are finance solutions available?
They include:
Alternative Funding Solutions
Some alternative funding solutions for current assets include:
Those above-noted solutions keep cash flow ‘humming,’ keeping suppliers, lenders, and employees ‘happy.’
Managing Asset Acquisition to Maintain Cash Flow
Another potential significant drain on our ‘cash flow hum’ is acquiring assets to run your business.
Unsecured loans, which do not require collateral, can also be considered to avoid draining cash flow. While the temptation from such ideas as ‘pride of ownership’ has some business owners/mgrs purchasing assets outright, that can drain our cash flow hum.
The optimal solution here is usually Equipment Financing/Leasing. Financing assets from daily operations is rarely the right thing to do.
Inventory Management and Asset Turnover
We'll also mention that for firms with inventories, the key to inventory management is solid asset turnover and maintaining the right inventory levels—always a challenge!
Assessing Your Business Cash Flow Needs
A good way to look at the ‘big picture’ in business cash flow is to isolate the movement of cash into what you can call the ‘constant daily hum’ of regular selling and collecting while assessing ‘non-regular’ outflows such as asset purchases, seasonal bulges in your business, new or large contracts.
Creating a cash flow forecast helps predict and manage financial inflows and outflows effectively.
Case Study:
A Manufacturer Alternative Financing Success Story
Background: A mid-sized Canadian manufacturer of seasonal outdoor equipment struggled with the classic challenge of mismatched cash flows. Their peak production periods required substantial capital investment months before their primary selling season, creating significant working capital pressure.
Challenge Breakdown:
- Required $750,000 in working capital during off-season production
- Suppliers demanded payment within 30 days
- Customers expected 60-90 day payment terms
- Traditional bank financing proved insufficient during peak periods
- Seasonal revenue patterns made traditional loan payments challenging
Alternative Financing Solution: By implementing a flexible business cash flow funding solution, the company gained access to:
- A revolving funding facility based on receivables
- Seasonal funding limits that adjusted to business cycles
- Supply chain financing options for key vendors
- Early payment programs for customers
- No fixed monthly payment requirements
Key Takeaways
-
Financial statements reveal your company’s funding eligibility through key performance indicators.
-
Credit scores significantly impact approval rates and terms for business funding.
-
Revenue patterns determine optimal funding amounts and repayment structures.
-
Historical cash flow demonstrates business stability to funding providers
-
Accounts receivable quality influences funding decisions more than quantity
Conclusion
Are you looking at putting the right lending facility in place to manage business cash flow?
Call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can ensure you’re tapping into the right financing sources for your… cash flow hum!
FAQ
How does cash flow funding improve business operations?
-
Eliminates payment gaps
-
Maintains steady supplier relationships
-
Enables bulk purchase discounts
-
Supports payroll management
-
Funds growth opportunities
What makes cash flow funding different from traditional loans?
-
Faster approval process
-
More flexible qualification criteria
-
Revenue-based rather than credit-based
-
No fixed monthly payments
-
Aligns with business cycles
Can seasonal businesses benefit from cash flow funding?
-
Manages seasonal revenue fluctuations
-
Maintains inventory levels
-
Supports year-round operations
-
Provides off-season working capital
-
Enables strategic purchasing
What industries typically qualify for cash flow funding?
-
Manufacturing companies
-
Distribution businesses
-
Service providers
-
Retail operations
-
Construction firms
What security is required for cash flow funding?
Funding business cash flow typically requires no hard assets as collateral. The funding is secured by your accounts receivable and business performance.
Is my business too small for cash flow funding? Businesses with minimum monthly revenues of $10,000 can qualify for cash flow funding solutions. Size is less important than stability and growth potential.
Can I use multiple funding sources simultaneously?
Multiple funding sources can be coordinated to optimize working capital management. Professional advice helps structure complementary solutions.
What factors determine funding approval?
-
Business age and stability
-
Monthly revenue consistency
-
Industry type and risk level
-
Bank statement analysis
-
Customer payment history
How long does funding typically last?
Cash flow funding programs usually operate as renewable facilities that can continue indefinitely if business performance meets the criteria.
What documentation is required for renewal?
-
Updated financial statements
-
Recent bank statements
-
Current accounts receivable aging
-
Tax compliance verification
-
Business performance metrics
-
Recent business bank statements covering the last three months of trading
